The new chief executive brought in to clean up and shrink the Swiss bank UBS yesterday forced Jerker Johansson to resign as head of its loss-making investment banking arm after just over a year.

It is the latest move within UBS, which lost Sfr20bn (£12bn) last year - a record in Swiss corporate history - to reposition itself and restore its heavily-damaged reputation. UBS's investment bank caused it to lose a further Sfr2bn in the first quarter.

UBS's senior executive ranks have been transformed within two years, with the old - and younger - guard discarded after the bank ran up writedowns of more than $50bn on toxic assets, was bailed out by the Swiss government and central bank, pursued in the US over tax fraud allegations and lost to Credit Suisse its status as the country's number one bank.

New chief Oswald Grübel has brought in two of Johansson's senior executives to run the investment bank after their former boss presided over an exodus of star traders and clients.

Alex Wilmot-Sitwell, a 13-year UBS veteran, and Carsten Kengeter, joint global head of fixed income for only seven months, have been entrusted with ridding the investment bank of its loss-making businesses as it bears the brunt of the fresh 8,700 job cuts ordered by Grübel and his new chief operating officer last week.

The pair are the fourth heads of the division in just over 18 months.

The past 18 months have seen both Marcel Ospel, former chairman and architect of UBS's disastrous foray into high-risk structured products, and his successor, Peter Kurer, quit. Marcel Rohner, a relatively youthful chief executive who replaced Peter Wuffli, also left.

UBS has also shed two chief financial officers and brought in a new chief risk officer, Philip Lofts, as it desperately seeks to restore its image, stop an outflow of wealthy customers and preserve its status as one of Switzerland's two global banks rather than sink into mediocrity.

Under pressure to dispose of the investment bank and refocus UBS entirely on private banking, Grübel insisted the division was "indispensable" to "our integrated business model" and the new chiefs would "remediate our legacy risks".

The investment bank has witnessed a dash for the door by several star traders as UBS slashed bonuses and eschewed more risky proprietary trading.

Confirming some of the losses, sources insisted they were not disproportionate to those of other banks - and many had simply been axed as UBS downsizes drastically.

But they admitted that below-market pay was a disincentive to staying on.

"The continued changes surely do not help to bring stability to the investment bank but may be part of Grübel's plan to further renew the key positions within the bank," Mathias Bueeler, a Kepler analyst, told Reuters.